In October last year, the Albanese Government announced the National Housing Accord, describing it as a ‘landmark agreement to address one of our nation’s biggest economic challenges: the supply and affordability of housing’.

Pleasingly, these initiatives closely aligned with HIA’s 2022 federal government election imperatives. HIA has been an advocate for the federal government’s role in tracking and reporting land and housing supply for decades, recognising the impact orderly planning and management of new housing supply has on the Australian economy. There is a fundamental role for the Commonwealth to take in the oversight of land and housing data.

The National Housing Accord promises to bring together stakeholders across all levels of government, investors and the building and construction sector to address the supply of quality affordable housing. Through the Accord, and with the support of the states and territories, the Government is committed to delivering up to 50,000 social and affordable homes.

The Housing Accord also sets an aspirational target to deliver one million new homes over five years from 2024.

How do we achieve this?

In February this year, the Australian Government introduced its Housing Australia Future Fund Bill to Parliament. Together, with the National Housing Supply and Affordability Council Bill 2023 and the Treasury Laws Amendment (Housing Measures No. 1) Bill 2023, the Bills enable the establishment of the Housing Australia Future Fund. The fund will facilitate grants through Housing Australia which address housing needs, in particular around social and affordable housing.

The Bills failed to be heard in June after a motion put forward by the Greens. At this stage the Bills will come before the Senate in October.

Their introduction has triggered wide-spread debate over affordability and supply with Independents and Greens questioning the adequacy of the $10 billion fund. HIA’s view, shared by most in the social sector, is that these Bills pave the way to addressing issues around supply which impact the entire housing continuum.

Here, we break down the roles of the different agencies set up to expedite the Accord.

HIA’s view is that these Bills pave the way to addressing issues around supply which impact the entire housing continuum.

Jocelyn Martin, HIA Deputy Managing Director - Policy & Industry

Housing Australia

The creation of Housing Australia to provide a clearly defined body with oversight of national housing policy issues is long overdue. The proposal to reform the National Housing Finance and Investment Corporation (NHFIC) into this body will provide a solid foundation for the expansion of its role.

The Fund

The $10 billion Housing Australia Future Fund will offer ongoing investment returns towards the delivery of 30,000 homes over five years. Returns from the Fund will also provide ongoing investments to address acute housing needs such as repair and maintenance for homes in remote communities, crisis options for women and children, and specialist services for veterans.

In recognising that much of the supply needs to come from the market, the Government has committed to enabling investment. Financial models that are designed to attract institutional investors by covering the gap between market rents and subsidised rents are considered a way to fund the increased need for social and affordable housing.

The Council

Federal, state and local governments – and the industry – undertake housing demand forecasting but with considerable duplication of effort. What is less consistent is the tracking and reporting on the actual and predicted level of supply over the short and medium term.

With inadequate, slow and inconsistent land supply data, regardless of the forecast demand, there continues to be no line of sight on the pace of supply to meet that demand. Infrastructure and other planning decisions based on these forecasts can in turn be sub-optimal with considerable cost to the community and the productivity of the economy.

The Government’s election commitment flagged that a new National Housing Supply and Affordability Council would be established to deliver a range of things,

• Set targets for land supply in consultation with state and territory governments 
• Nationally consistent data on housing supply, demand and affordability 
• Advise on ways to improve land use planning and land supply which will boost national productivity and improve housing affordability 
• Reports on the release of government-owned land, rental affordability and homelessness.

Giving the Council the capacity to undertake any other related research it considers will have a potentially material impact on housing supply and affordability is also appropriate, along with its role in the development of the National Housing and Homelessness Plan. 

The Plan

The Council will advise on the development of a National Housing and Homelessness Plan.

The election commitment is that this will ‘set out the key short-, medium- and long-term reforms needed to make it easier for Australians to buy a home, easier to rent, and put a roof over the heads of more homeless Australians’.

The targets under the Bills are an important benchmark that industry can use to hold governments to account. The delivery of 200,000 homes per year over a five-year period will be a challenge. When this figure was delivered over a four-year period from 2014-19, housing affordability notably improved. But HIA’s forecasts predict that under the current economic conditions, the supply of new homes will fall well short of this in the 2023-24 period.

The extent of the housing crisis is a shared challenge, but the Housing Australia Future Fund will provide the crucial base for reform.

It is important the Opposition, the Greens and cross bench do not delay in passing these Bills. As the current housing cycle ends, its passing will signal the acknowledgment that improvements to supply are a crucial factor in improving affordability – an eventuality that will be well received by the industry.

First published on 7 June 2023